DVC - Running Rough #'s

[BigRedDad]

I am not even on the cusp of thinking about DVC. However, I run numbers at work all the time for finance, investments, and budgets. So, I figured I would run a few quick numbers that I could find online. The example I used was a Beach Club resale with 200 points.

Resale: $18,000
Maintenance (200): ~$1000
Vacation: Roughly 2 weeks during the value season
Add'l to cover 2 full weeks (estimate): $500

Looking at this data, and that is all it really is, you can compare the cost of vacations. 2 weeks a BC is ~$5000 per year on a value season. This is just one example, but the break even point for DVC is year 5. After that, the difference becomes exponential.

This example does not take into account drastic Maintenance fee increases and selling of points. I figured over time, those will wind up balancing.

Therefore, if I was looking at this as an investment/worth joining, I would be looking at having it at least 5 years. The deciding factor at that point will be the initial payment of $18k.

Does anyone see a flaw to the calculation? I am basing this off of the information I could find online.

[Ian]

The only flaw I see is that you assume zero inflation on the cost of a week at the Beach Club.

Disney raises resort rates to one degree or another every few years, so somewhere you'd have to factor that into the payback period, as well.

That was actually the biggest tipping point for me was the ability to hedge against inflation costs for vacations.

10 years from now what will most people be paying for a week at the Beach Club? I know what I'll be paying ...

[BigRedDad]

WDWacky,
I don't think that was a "flaw" in the calculation. I think that only solidifies the reasoning behind the calculation. There are 100 if's, and's, or but's in this data. Looking at raw numbers gives you an idea of the advantage.

[Ian]

WDWacky,
I don't think that was a "flaw" in the calculation. I think that only solidifies the reasoning behind the calculation. There are 100 if's, and's, or but's in this data. Looking at raw numbers gives you an idea of the advantage.

I agree ... I was just pointing out that hedging against inflation is only one more item on the plus side of the equation and one that, IMO, is the biggest.

[dlpmikki]

If you look in the why not to buy topic you will find people with some fairly extreme ways of doing the numbers. All I know is that I have some wonderful holidays over the last 15 years at DVC properties and could still actually sell my points for more than I paid for them. I'm not going to because DVC is an investment in yourself and your family - it isn't a money thing at all.

[MarkC]

I am also a "numbers" guy and did the math. You have to look at what interest you could have received had you invested the money as well, but you also have to figure inflation. My guess based on 4% inflation is that by the end of the timeshare (2042), the cost of one night at the Beach Club will be around $1,000. We just purchased a BCV resale (100 points) knowing that our kids and grandkids will be enjoying it as well, which is something money can't buy or figure into. Another thing to consider--we will use the Disney Visa to pay our maintenance fees. So for us, we will be staying 6-7 nights per year at the Beach Club for the next 35 years without paying another penny for a motel. We decided we're going to go to Disney anyway, so we just as well make it worth our while. I wish we would have done this 10 years ago but I didn't have the money then, nor did I think I'd be going every year.

[Fortgoofy97]

I to run numbers at work, but never looked at purchasing DVC with a break even. First you are assuming you will take two weeks, with DVC there are always the intangibles that can never be calculated. The convenience, the ease and enjoyment of knowing," Hey we have the points why don't we go in May or any other time when you just feel like getting away!" You can run numbers 20 different ways,, look at pros and cons but it all comes down to an emotional decision, "Whats it worth to know we have the capability to go away at anytime, as long as we have enough poins?!!"